11pm BST / 6pm ET update

US elections: Congressional Democrats attack McCain on Iran sanctions

A group of Jewish congressional Democrats today lambasted Republican presidential nominee John McCain for voting against 2005 legislation that would have toughened sanctions against Iran.

At a press conference, the Democrats offered a counteroffensive to McCain's efforts to portray Democratic nominee Barack Obama as soft on Iran and to sow doubt among Jewish voters about his commitment to Israel.

McCain's vote against the legislation, which would have barred foreign subsidiaries of US companies from doing business with the Iranian regime, presented the Democrats with an opportunity to portray him as inexorably linked to the oil industry.

The oil industry was a chief beneficiary of the loophole the legislation sought to close.

The Bush administration has longstanding ties to the oil industry and with petrol prices topping $4 per gallon, Democrats hope to win voters by suggesting McCain takes his cues from the oil business.

"McCain tries to give the impression that he's tough on Iran, but when it came time to stand up to party leaders and big oil, John McCain stood down," said New Jersey senator Frank Lautenberg.

Also, the gathering of Jewish politicians also gives them an opportunity to bolster Obama's standing among Jewish voters.

"Those of us here, and there are so many, many more who know Senator Obama, have the complete faith" in his positions on Iran and the Middle East, said Michigan congressman Sandy Levine.

Lautenberg said, "Barack Obama stands up for Israel when the chips are down and John McCain did not."

The McCain campaign noted that McCain had voted for a separate amendment that ultimately passed, which increased penalties for US companies that operated in Iran through foreign subsidiaries.

"Senator Lautenberg is unfairly characterising John McCain's position for partisan political purposes," said Kori Schake, a senior policy advisor to the McCain campaign.

Obama has said he would be willing to engage in direct talks with the Iranian leadership. McCain and the Republicans have used that to suggest he cannot be trusted to be firm with Iran, an avowed enemy of Israel.

The Democrats sought to turn the tables on McCain today, saying his vote allows money to flow from US companies through the Iranian regime to terrorist group it supports, like Hamas and Hizbullah.

The legislation in question was an amendment offered by Lautenberg to a 2005 defence spending bill. Obama and all Democrats but one voted in favour of the amendment; McCain and all but three Republicans voted against it. It failed, 51 to 47.

The amendment's opponents questioned how the US could bar foreign-held companies from investing in Iran.

Schake said Lautenberg's amendment would have allowed foreign companies to apply foreign law to US subsidiaries operating on US soil.

In criticising McCain's vote, Senator Ben Cardin said economic sanctions had helped drive the Soviet Union to collapse, and had provoked South Africa ultimately to end apartheid.

"Sanctions can be effective against Iran, but we must close the loopholes that have allowed our own US companies to flout the law through their foreign subsidiaries, putting the American people and allies like Israel at risk," Cardin said.

The Democrats had no estimate of the size of US investment in Iran through foreign subsidiaries. They repeatedly mentioned Halliburton, the oil-services giant of which vice-president Dick Cheney was chief executive until August 2000, as a major beneficiary of the law.

Through a subsidiary, Halliburton once signed a contract to pay the Iranian regime about $30m for the right to develop a natural gas field there. In 2007, the company said it no longer had any business there.

Conflict Securities Advisory Group, which tracks companies that do business in countries designated by the US as state sponsors of terrorism, estimates about 25 US companies work in Iran.

Adam Pener, the group's chief operating officer, said the amount of US investment in Iran is very small compared to the amount European companies spend there.

"The actual economic impact on Iran is minimal," he said. "It's not very much. I'm confident saying, that economically speaking, it is very little compared to even one European oil company."

The McCain campaign did not immediately respond to a request for comment.

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